Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/X/ Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Salomon Brothers Investors Fund Inc
(Name of Registrant as Specified In Its charter)
Payment of Filing Fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________
(2) Aggregate number of securities to which transaction applies:
______________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it is
determined):
______________________________________________________________
(4) Proposed maximum aggregate value of transaction:
______________________________________________________________
(5) Total fee paid:
______________________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statements number, or the Form or Schedule and the date
of its filing.
<PAGE>
(1) Amount Previously Paid:
_____________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_____________________________________________________________
(3) Filing Party:
_____________________________________________________________
(4) Date Filed:
_____________________________________________________________
<PAGE>
Salomon Brothers Investors Fund Inc
7 World Trade Center, New York, New York 10048
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
March 6, 1997
To the Stockholders:
Notice is hereby given that a Special Meeting of Stockholders of Salomon
Brothers Investors Fund Inc (the "Fund") will be held at 7 World Trade Center,
2nd Floor Auditorium, New York, New York on Tuesday, April 29, 1997 at
3:00 p.m., New York time for the purposes of considering and voting upon:
1. Approval of Amendment to Management Contract to Increase the
Base Fee Component of the Management Fee (Proposal 1);
2. Approval of Amended and Restated Articles of Incorporation
of the Fund (Proposal 2);
3. Approval of an Amendment to the Fund's Fundamental
Investment Policy Regarding the Borrowing of Money to Meet Redemption
Requests (Proposal 3);
4. Approval of an Amendment to the Fund's Fundamental
Investment Policy Regarding the Lending of Portfolio Securities
(Proposal 4); and
5. Any other business that may properly come before the
Meeting.
The close of business on February 26, 1997 has been fixed as the
record date for the determination of stockholders entitled to notice of
and to vote at the Meeting.
By Order of the Board of Directors,
Jennifer G. Muzzey
Secretary
TO AVOID UNNECESSARY EXPENSE OR FURTHER SOLICITATION, WE URGE YOU
to indicate voting instructions on the enclosed proxy, date and sign it
and return it promptly in the envelope provided, no matter how large or
small your holdings may be.
<PAGE>
Instructions for Signing Proxy Cards
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense to the Fund involved in
validating your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in
the registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the
party signing should conform exactly to a name shown in the
registration.
3. All Other Accounts: The capacity of the individual signing
the proxy card should be indicated unless it is reflected in
the form of registration. For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. . . . . . . . . . . . . . . ABC Corp.
(2) ABC Corp. . . . . . . . . . . . . . . John Doe, Treasurer
(3) ABC Corp. . . . . . . . . . . . . . . John Doe
c/o John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan . . . . John Doe, Trustee
Trust Accounts
(1) ABC Trust . . . . . . . . . . . . . . Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee . . . . . . . . Jane B. Doe
u/t/d 12/28/78
Custodial or Estate Accounts
(1) John B. Smith Cust . . . . . . . . . John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith . . . . . . . . . . . . John B. Smith, Jr., Executor
<PAGE>
Salomon Brothers Investors Fund Inc
7 World Trade Center, New York, New York 10048
____________________
PROXY STATEMENT
This proxy statement is furnished in connection with the
solicitation by the Board of Directors of Salomon Brothers Investors Fund
Inc (the "Fund") of proxies to be used at a special meeting of stockholders
to be held at 7 World Trade Center, New York, New York, on Tuesday,
April 29, 1997 at 3:00 p.m., New York time (and at any adjournment or
adjournments thereof) (the "Meeting"). This proxy statement and the
accompanying form of proxy are first being mailed to stockholders on or
about March 6, 1997. Stockholders who execute proxies retain the right to
revoke them in person at the Meeting or by written notice received by the
Secretary of the Fund at any time before they are voted. Unrevoked
proxies will be voted in accordance with the specifications thereon and,
unless specified to the contrary, will be voted FOR Proposals 1, 2, 3 and
4. The close of business on February 26, 1997 has been fixed as the
record date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at the Meeting. Each stockholder is
entitled to one vote for each full share and an appropriate fraction of a
vote for each fractional share held. As of February 26, 1997, there were
_______________ shares of Common Stock issued and outstanding.
In accordance with the Fund's By-Laws, a quorum is
constituted by the presence in person or by proxy of the holders of record
of a majority of the outstanding shares of Common Stock of the Fund
entitled to vote at the Meeting. In the event that a quorum is not present
at the Meeting, or in the event that a quorum is present but sufficient
votes to approve any of the proposals are not received, the persons named
as proxies may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting
in person or by proxy. The persons named as proxies will vote those
proxies which they are entitled to vote FOR or AGAINST any such proposal
to adjourn to another date in their discretion. A stockholder vote may be
taken on one or more proposals in this proxy statement prior to any such
adjournment if sufficient votes have been received for approval.
Abstentions and Broker Non-Votes do not count as votes cast with respect
to any proposal. With respect to a proposal requiring the affirmative
vote of a majority of the outstanding shares of Common Stock, the effect
of abstentions and Broker Non-Votes is the same as a vote against such
proposal. "Broker Non-Votes" are shares held in the name of a broker or
nominee for which an executed proxy is received by the Fund, but are not
voted on the proposal because voting instructions have not been received
from the beneficial owners or persons entitled to vote and the broker or
nominee does not have discretionary voting power.
Salomon Brothers Asset Management Inc ("SBAM"), whose
principal business address is 7 World Trade Center, New York, New York
10048 is the Fund's investment adviser. Investors Bank & Trust Company
("IBT"), located at 89 South Street, Boston, Massachusetts 02111, is the
Fund's administrator.
<PAGE>
Proposal 1: Approval of Amendment to Management Contract to Increase the
Base Fee Component of the Management Fee
At a meeting held on January 28, 1997, the Board of
Directors, including all of the directors who are not "interested persons"
of the Fund, as defined in the Investment Company Act of 1940, as amended
(the "1940 Act") (the "Non-Interested Directors"), unanimously approved an
amendment to the terms of the Management Contract (the "Management
Contract") with SBAM to increase the base fee component of the Fund's
performance-based fee arrangement, subject to approval by the Fund's
stockholders. The directors unanimously recommend that the stockholders
approve the amendment to the Management Contract. The Management Contract
as amended, marked to show proposed changes from the existing Management
Contract, is attached hereto as Exhibit A. Except for the amendment set
forth in this proposal, the terms of the amended Management Contract are
identical to the current terms.
In 1994, upon unanimous recommendation of the Fund's Board of
Directors, the Fund's stockholders approved a change in the structure of
the management fee payable by the Fund to SBAM to a performance-based fee
arrangement. Under this arrangement, the Fund pays SBAM a quarterly fee
(the "Base Fee") subject to increase or decrease (the "Performance
Adjustment") depending on the extent, if any, to which the investment
performance of the Fund exceeds or is exceeded by the investment record of
the S&P 500 Composite Stock Price Index (the "S&P 500 Index") over a rolling
one-year period (i.e., four consecutive calendar quarters).
As more fully described below under the caption "Comparison
of the Current Management Fee with the Proposed Fee," the amendment
described in this proposal would increase the Base Fee by .15% at each
existing breakpoint level. The amendment would not change the terms of
the Performance Adjustment.
Reasons for the Proposed Increase in the Base Fee Component and Factors
Considered by the Board of Directors
1. Reasons for the Proposed Change
SBAM has informed the Board of Directors that its goal has
been to strive for a high level of portfolio performance while maintaining
the Base Fee and total Fund expenses at levels that are generally no
higher than the median management fees and total expenses of the Fund's
peer groups. In addition, as discussed in further detail below, according
to information provided by Lipper Analytical Services, Inc. ("Lipper"),
the Fund's performance over the past several years has been among the best
while the Fund's Base Fee and total expense ratio fall below median levels
as compared with investment companies judged by Lipper to be comparable
to the Fund.
The Board believes that, under these circumstances, an
increase in the Base Fee is necessary and appropriate in order to ensure
that SBAM is able to remain competitive in attracting and retaining
personnel. The Board recognizes that the continuing success of the Fund
is in large part dependent on the quality of SBAM's personnel. In addition,
the Board believes that over the past several years SBAM has made a significant
and ongoing commitment of resources to the Fund. As a result of its efforts to
attract and retain highly trained and capable personnel, SBAM has continued to
add portfolio managers, securities
<PAGE>
analysts, traders and legal and other administrative support staff to the
teams supporting the Fund, many of whom have relatively senior experience
levels. The Board believes that the addition of these individuals has
benefitted the Fund in many respects, including increasing both the
coverage of the industries in which the Fund may invest and portfolio
management expertise generally, contributing to the Fund's highly positive
performance record. In addition, SBAM has added new technology and
systems for portfolio accounting and analysis and monitoring of the Fund's
holdings, as well as for securities valuation and risk management
analysis. The addition of personnel and new technology by SBAM was in
part designed to support the administration and operation of the Fund's
multiple pricing system for the Fund's shares, which was implemented in
early 1995.
In reaching its decision, the Board considered the fact that
Lipper calculated the Fund's aggregate total return performance against
all other open-end growth and income funds and ranked the Fund's Class O
shares 13 out of 522 funds, 13 out of 329 funds and 24 out of 212
funds for the one-, three- and five- year periods ended December 31, 1996.
The Fund's aggregate total return performance (Class O shares) during the
periods was 30.6%, 74.5% and 116.0%, respectively, according to Lipper.
These returns compare favorably to broad equity market returns over the
periods; the aggregate return for the S&P 500 Index for the one-, three- and
five year periods ended December 31, 1996 were 23.0%, 71.3% and 102.9%,
respectively. In recognition of the Fund's strong performance over extended
time periods, Morningstar, another well-known fund ranking organization,
recently upgraded the Fund (Class O shares) to a five star rating, its highest,
in the growth and income category.
The information provided by Lipper also indicates that the
Fund's Base Fee and total expense ratio as of December 31, 1996 fall below
the median contractual management fee rates and expense ratios of the
funds in the comparison groups (most of which do not have a performance
based fee arrangement), notwithstanding the 1994 restructuring. Moreover,
even with the higher Base Fee and total expense ratio that are proposed, the
information supplied by Lipper indicates that on a pro forma basis the Base Fee
as of December 31, 1996 would still fall below the median management fee rates
of the funds in the comparison groups and the Fund's total expense ratio as of
the same date would fall either below, at, or slightly above the median expense
ratios of the funds in the comparison groups.
The Board also considered comparisons of the Fund's effective
management fee rate (taking into consideration the Performance Adjustment).
The Fund's effective management fee rate as of December 31, 1996 (after a year
in which the Fund significantly outperformed the S&P 500 Index while the Lipper
Growth & Income Fund Index of 583 funds underperformed the S&P 500 Index) still
fell below the median management fee rates of its peer comparison groups. On a
pro forma basis taking into account the increase set forth in this proposal,
the Fund's effective management fee would fall slightly below or, with respect
to one comparison group, would fall at, the median management fee rates of the
funds in the comparison groups.
2. Deliberations by the Board of Directors
A proposal for an increased Base Fee was presented by SBAM to
the Board of Directors at a meeting held on October 15, 1996. At this
meeting, SBAM presented the reasons discussed above to the Board as the
<PAGE>
basis of its request. On January 27, 1997, the Non-Interested Directors
met separately with their legal counsel and on January 28, 1997, the entire
Board of Directors convened. Information prepared specifically for the purpose
of assisting the Non-Interested Directors in their evaluation of the proposed
amendment included the analysis prepared by Lipper of the comparative
performance, management fee and expenses of the Fund with the funds chosen by
Lipper as comparable to the Fund, as discussed above.
The Fund's legal counsel advised the Board of Directors on
the nature of the matters to be considered and the standards to be used by
the Board in approving the proposed fee. The Board, in consultation with
its legal counsel, extensively considered the reasons and factors discussed
above, particularly the fact that while the Fund's performance has been among
the best as compared with its peers, the current fees and expenses of the Fund
at existing asset levels are generally below those of comparable funds, and the
proposed fees and expenses would continue to be competitive with comparable
funds. Moreover, the Board evaluated the nature, quality and extent of
services furnished by SBAM and possible economies of scale, focusing especially
on the ongoing commitment of resources, as described above. SBAM's
profitability with respect to the Fund and the financial resources of SBAM
were also considered and in that regard, the Board considered that SBAM
pays from its management fee certain of the Fund's administration and
accounting fees to IBT at a rate of .08% of the Fund's average daily assets and
would continue to do so under the proposed amendment. The Board also
considered that in 1994 the Board and the Fund's stockholders approved the
introduction of a performance-based fee arrangement which the Board expected to
result in an increase in the management fee. In light of the reasons
discussed above however, the Board believes that the increase set forth in this
proposal is fair and reasonable and in the best interests of the Fund's
stockholders.
Comparison of the Current Management Fee with the Proposed Fee
1. The Current Fee
The Fund pays SBAM a quarterly fee subject to an increase or
decrease depending on the extent, if any, to which the investment
performance of the Fund exceeds or is exceeded by the investment record of
the S&P 500 Index over a rolling one year period (i.e., four consecutive
calendar quarters).
(a) Calculation of the Base Fee
The Base Fee is based on the following annual rates:
Average Daily Net Assets Annual Fee Rate
First $350 million .500%
Next $150 million .400%
Next $250 million .375%
Next $250 million .350%
Over $1 billion .300%
The Base Fee is accrued daily and paid quarterly.
(b) Calculation of the Performance Adjustment
<PAGE>
For each percentage point by which the investment performance
of the Fund exceeds or is exceeded by the investment record of the S&P
500, the Base Fee is adjusted upward or downward by .01% (annualized) with
a maximum annual adjustment of +/-.10%. The performance adjustments are
accrued by the Fund monthly and are paid quarterly, based on a rolling
one-year period.
At the end of each calendar quarter, for each percentage
point by which the investment performance of the Fund exceeds or is
exceeded by the investment record of the S&P 500 Index over the one year
period ending on the last day of the calendar quarter for which the
adjustment is being calculated, the Base Fee is adjusted upward or
downward by the product of (i) 1/4 of .01% multiplied by (ii) the average
daily net assets of the Fund for the one year period preceding the end of
the calendar quarter. If the amount by which the Fund outperforms or
under performs the S&P 500 Index is not a whole percentage point, a pro
rata adjustment shall be made. However, there will be no performance
adjustment unless the investment performance of the Fund exceeds or is
exceeded by the investment record of the S&P 500 Index by at least one
percentage point. The maximum quarterly adjustment is 1/4 of .10%, which
would occur if the Fund's performance exceeds or is exceeded by the S&P
500 Index by ten or more percentage points.
The investment performance of the Fund, for a period of one
year, shall mean the sum of: (i) the change in the Fund's net asset value
per share during such period; (ii) the value of cash distributions per
share accumulated to the end of such period; and (iii) the value of
capital gains taxes per share (if any) paid or payable on undistributed
realized long-term capital gains accumulated to the end of such period,
expressed as a percentage of its net asset value per share at the
beginning of such period. For this purpose, the value of distributions
per share of realized capital gains and of dividends per share paid from
investment income shall be treated as reinvested in shares of the Fund at
the net asset value per share in effect at the close of business on the
record date for the payment of such distributions and dividends, after
giving effect to such distributions and dividends. In addition, while the
Fund does not anticipate paying any taxes, the value of any capital gains
taxes per share paid or payable on undistributed realized long-term
capital gains shall be treated as reinvested in shares of the Fund at the
net asset value per share in effect at the close of business on the date
on which provision is made for such taxes, after giving effect to such
taxes. However, notwithstanding the foregoing, the investment performance
of the Fund shall not include, and there shall be excluded from the change
in the net asset value per share for such period and the value of the
Fund's cash distributions per share accumulated to the end of such period
shall be adjusted for, any increase or decrease in the investment
performance of the Fund resulting from the issuance, sale or repurchase of
any shares of the Fund's Common Stock or any other securities of the Fund.
The investment record of the S&P 500 Index, for a period of
one year, shall mean the sum of: (i) the change in the level of the index
during such period, and (ii) the value, computed consistently with the
index, of cash distributions made by companies whose securities comprise
the index accumulated to the end of such period, expressed as a percentage
<PAGE>
of the index level at the beginning of such period. For this purpose,
cash distributions on the securities which comprise the index shall be
treated as reinvested in the index at least as frequently as the end of
each calendar quarter following the payment of the dividend.
2. The Proposed Fee
The table below reflects the proposed amendment to the
management fee. As indicated in the table, it is proposed that the fee be
amended by increasing the Base Fee by .15% at each breakpoint level. No
changes are proposed to the calculation of the performance adjustment.
Average Daily Net Assets Annual Fee Rate
First $350 million .650%
Next $150 million .550%
Next $250 million .525%
Next $250 million .500%
Over $1 billion .450%
3. Effective Date of the Proposed Fee Structure
If approved by the Fund's stockholders, the amendment to the
Management Contract will become effective on the first day of the month
following the date of stockholder approval, and the Management Contract as
amended will remain in force until April 30, 1998, subject to continuance
in accordance with the provisions discussed below. If the amendment to
the Management Contract is not approved by the stockholders, the
Management Contract will continue in effect in accordance with its current
terms. The Fund's Board of Directors, including all of the Non-Interested
Directors, has unanimously approved the continuance of the Management
Contract until April 30, 1998 as amended and according to its current
terms.
Fees Paid
For the fiscal year ended December 31, 1996, the management
fee paid to SBAM by the Fund was $2,455,501, comprised of a Base Fee of
$2,255,570 and a Performance Adjustment of $199,931. If the proposed fee
increase had been in effect for this period, the Fund would have paid SBAM
a management fee of $3,170,671 comprised of a Base Fee of $2,970,740 and a
Performance Adjustment of $199,931. This represents a 29% increase of
$715,170 from the fee actually paid under the Management Contract for such
period.
Current and Pro Forma Fees and Expenses
The following expense table and example sets forth the
unaudited fees and expenses incurred by each of the Class A, Class B,
Class C and Class O shares of the Fund for its fiscal year ended December
31, 1996 and also sets forth pro forma fees and expenses of the Fund
assuming that the proposed management fee had been in effect during this
period.
<PAGE>
<TABLE>
<CAPTION>
Current and Pro Forma
---------------------------------------------------
Class O
Class A Class B Class C <F2>
------------ ------------ ---------- ---------
<S> <C> <C> <C> <C>
Stockholders
Transaction
Expenses<F3>
Maximum Sales Charge
Imposed on Purchases of
Shares (as a percentage
of offering price) . . 4.75%<F1> None None None
Sales Charge Imposed on
Reinvested Dividends . None None None None
Contingent Deferred
Sales Charge (as a
percentage of original
purchase price or
redemption price,
whichever is lower) . . 1% during 5% first year, 1% during None
the first 5% second year, the first
year for 4% third year, year
purchases of 3% fourth year,
$1 million 2% fifth year,
or more 1% sixth year,
and 0% after
sixth year
Redemption Fees . . . . None None None None
Exchange Fee . . . . . None None None None
____________________
<FN>
<F1> Reduced for purchases of $50,000 and over, decreasing to 0% for
purchases of $1,000,000 and over.
<F2> Only Class O shareholders are permitted to purchase additional
Class O shares.
<F3> Under certain circumstances, certain broker/dealers may impose
additional transaction fees on the purchase and/or sale of shares.
See "Purchase of Shares" in the Prospectus for a further
explanation.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Pro Forma
------------------------------------ -------------------------------------
Class A Class B Class C Class O Class A Class B Class C Class O
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Fund Operating Expenses
Management fees<F1> .52% .52% .52% .52% .67% .67% .67% .67%
Rule 12b-1 fees<F2> .25% 1.00% 1.00% --- .25% 1.00% 1.00% ---
Other expenses<F3> .29% .30% .28% .24% .29% .30% .28% .24%
Total Fund Operating Expenses 1.06% 1.82% 1.80% .76% 1.21% 1.97% 1.95% .91%
____________________
<FN>
<F1> Management fees included in the table above reflect the performance
of the Fund through the year ended December 31, 1996.
<F2> The amounts set forth for "Other expenses" are based on the Fund's
operating expenses for the fiscal year ended December 31, 1996
which are calculated as a percentage of average daily net assets
and included fees for shareholder services, administrative fees,
custodial fees, legal and accounting fees, printing costs and
registration fees.
<F3> Upon conversion to Class A shares, Class B and Class C shares will
no longer be subject to a distribution fee. Salomon Brothers
receives an annual Rule 12b-1 service fee of .25% of the value of
average daily net assets of Class A shares, and receives an annual
Rule 12b-1 fee of 1.00% of the value of average daily net assets of
Class B and Class C shares, consisting of a .75% distribution fee
and a .25% service fee.
</TABLE>
Example
The following table demonstrates the projected dollar amount
of total cumulative expenses that would be incurred over various periods
with respect to a hypothetical investment in each class of the Fund. The
example assumes payment by the Fund of operating expenses at the levels
set forth in the preceding table and is also based upon the following
assumptions:
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) redemption at the end of
each time period, with the exception of the lines marked "Class B No
redemption," in which case it is assumed that no redemption is made at the
end of each time period:
<PAGE>
<TABLE>
<CAPTION>
Current Pro Forma
--------------------------------------------- --------------------------------------------
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
---------- -------- ---------- ------------ ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares<F1> $58 $80 $103 $171 $59 $ 84 $111 $187
Class B Shares<F2> 68 97 119 175 70 102 126 192
Class B No
redemption 18 57 99 175 20 62 106 192
Class C Shares<F3> 28 57 97 212 30 61 105 227
Class O Shares 8 24 42 94 9 29 50 112
____________________
<FN>
<F1> Assumes deduction at the time of purchase of the maximum 4.75%
sales charge.
<F2> Assumes deduction at the time of redemption of the maximum
contingent deferred sales charge applicable for that time period.
<F3> Reflects the conversion to Class A shares six years after purchase,
and therefore years seven through ten reflect Class A expenses.
</TABLE>
The purpose of the foregoing table and example is to assist
investors in understanding the various costs and expenses that an investor
in the Fund would bear either directly or indirectly under the current and
the proposed management fee. The payment of such costs and expenses will
reduce the investment return on an annual basis. Except where noted, the
information in the foregoing table does not reflect any fee waivers in
expense reimbursement arrangements that may be in effect.
The example should not be considered as representative of
past or future expenses and actual expenses for the Fund may be higher or
lower than the amounts shown in the fee tables. Moreover, while the
example assumes a 5% annual return, the Fund's performance will vary and
may result in a return greater or less than 5%.
Services Provided by SBAM
Under the terms of the Management Contract, SBAM manages the
operations of the Fund, makes purchases and sales of portfolio securities
on behalf of the Fund and provides it with other services. Pursuant to
the Management Contract, SBAM, at its expense, provides the Fund with
office space and office facilities reasonably necessary for the operation
of the Fund and with personnel satisfactory to the Fund's Board of
Directors to serve as officers, employees and directors affiliated with
SBAM.
In addition, SBAM is responsible for performing the
administrative and management services necessary for the Fund's operation
and providing the office space, facilities, equipment and personnel
necessary therefor. Among these services are: (i) Securities and
Exchange Commission compliance, including recordkeeping, reporting
requirements and proxies; (ii) supervision of Fund operations, including
<PAGE>
coordination of functions of the transfer agent, custodian, accountants,
counsel and other parties performing services or operational functions for
the Fund; (iii) administrative and clerical services, including accounting
services and maintenance of books and records; and (iv) services to the
Fund's stockholders, including responding to stockholder inquiries and
maintaining a flow of information to stockholders. SBAM has retained IBT
to provide certain administrative services to the Fund, including certain
accounting, clerical and bookkeeping services, Blue Sky compliance,
corporate secretarial services and assistance in the preparation and
filing of tax returns and reports to shareholders and the Securities and
Exchange Commission. For its services, SBAM pays IBT a fee at an annual
rate of .08% of the Fund's average daily net assets.
The Management Contract was last approved by the Board on
January 28, 1997. The Fund's stockholders approved an amendment to the
Management Contract on March 1, 1994 to restructure the management fee.
The Management Contract requires annual approval by the vote
of a majority of Non-Interested Directors cast in person at a meeting called
for the purpose of voting on such approval, and either by a vote of the Board
of Directors or a majority of the outstanding voting securities of the Fund.
The Management Contract may be terminated, without any penalty, on 60 days'
written notice to SBAM by the Fund's Board of Directors or by vote of the
holders of a majority of the Fund's outstanding voting securities, or on
60 days' written notice to the Fund by SBAM and will automatically terminate
in the event of its assignment, as defined in the 1940 Act.
Portfolio Transactions with Salomon Brothers Inc
During the fiscal year ended December 31, 1996, the Fund paid
$59,316 in brokerage commissions to Salomon Brothers Inc ("SBI"), an
"affiliated broker-dealer," as defined in the 1940 Act. Commissions to
SBI in 1996 represented 10% of the total brokerage commissions paid by the
Fund and SBI executed less than [1]% of the aggregate dollar amount of
Fund transactions.
Information about SBAM
The table below provides certain information regarding other
registered investment companies advised by SBAM with similar investment
objectives to that of the Fund.
<TABLE>
<CAPTION>
Management Fee
(as a Percentage of Aggregate Net
Average Net Assets as of
Name of Fund Assets) December 31, 1996
------------ -------------------- ------------------
<S> <C> <C>
The Salomon Brothers Fund First $350 million .500%<F4> $1,440,684,966
Inc ("SBF"). . . . . . . Next $150 million .400%
Next $250 million .375%
Next $250 million .350%
Over $1 billion .300%
Plus the Performance
Adjustment
<PAGE>
Salomon Brothers Capital First $100 million 1.00% $136,635,370
Fund Inc . . . . . . . . Next $100 million .75%
Next $200 million .625%
Over $400 million .50%
Salomon Brothers
Opportunity Fund Inc . . 1.00% $158,810,429
______________________
<FN>
<F4>Stockholders of SBF are being asked to approve the same increase in
the Base Fee component as described herein.
</TABLE>
The names and principal occupations of each executive officer
and director of SBAM are set forth in the following table. Unless
otherwise stated, the business address of each officer and director of
SBAM is Seven World Trade Center, New York, New York 10048.
Position with SBAM and
Name Principal Occupation
-----------------------
Thomas W. Brock Chairman, Chief Executive Officer and
(Director of the Fund) Managing Director of SBAM and Managing
Director and Member of the Management
Board of SBI
Michael S. Hyland President, Managing Director and
(Chairman and President of the Member of Board of Directors of SBAM
Fund) and Managing Director of SBI
Rodney B. Berens Managing Director and Member of Board
of Directors of SBAM and Managing
Director and Member of the Management
Board of SBI
Vilas Gadkari Managing Director of Member of Board
Victoria Plaza, 111 Buckingham of Directors of SBAM and Managing
Palace Road Director of SBI
London, England SW1W OSB
Richard J. Carbone Treasurer of SBAM and Managing
Director of SBI
Zachary Snow Secretary of SBAM and Managing
Director and Counsel of SBI
SBAM is an indirect wholly-owned subsidiary of Salomon
Brothers Holding Company Inc ("SBHC"), which is in turn wholly owned by
Salomon Inc ("SI"), a public reporting company. SBHC and SI are located
at Seven World Trade Center, New York, New York 10048.
The following table lists the officers of the Fund, in
addition to Mr. Hyland, who are also officers or employees of SBAM.
<PAGE>
Position with
Name the Fund Position with SBAM
- ---- ---------------- -------------------
Richard E. Dahlberg Executive Vice President Managing Director
Allan R. White, III Executive Vice President Managing Director
Lawrence H. Kaplan Executive Vice President Vice President
and General Counsel and Chief Counsel
Pamela Milunovich Vice President Vice President
Jennifer G. Muzzey Secretary Employee
Alan M. Mandel Treasurer Vice President
Reji Paul Assistant Treasurer Investment Accounting
Manager
Janet S. Tolchin Assistant Treasurer Investment Accounting
Manager
Noel B. Daugherty Assistant Secretary Employee
Share Ownership
The following table sets forth, as of December 31, 1996,
shares of the Fund owned beneficially by, and certain other share
ownership information with respect to, Directors of the Fund, executive
officers of the Fund and all executive officers and Directors as a group.
[As of this date, the executive officers and Directors of the Fund owned,
individually and in the aggregate, less than 1% of the outstanding shares of
the Fund.] [Update 5% ownership of each class].
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned
Beneficial Owner As of December 31, 1996
- ------------------- ------------------------
<S> <C>
Charles F. Barber [12,327.965
Andrew L. Breech --
Thomas W. Brock --
Carol L. Colman 350.697
William R. Dill 609.775
Michael S. Hyland --
Clifford M. Kirtland, Jr. --
Robert W. Lawless --
Louis P. Mattis 735.228
Thomas F. Schlafly 4,320.413
Richard E. Dahlberg --
Allan R. White, III --
Lawrence H. Kaplan --
Pamela Milunovich --
Alan M. Mandel --
Jennifer G. Muzzey --
All executive officers and
Directors as a group 18,144.078]
</TABLE>
<PAGE>
Required Vote
Approval of the proposed amendment will require the
affirmative vote of a majority of the Fund's outstanding voting
securities. The vote of a majority of the outstanding voting securities,
as set forth in the 1940 Act, means the vote: (1) of 67% or more of the
voting securities present at the meeting if the holders of more than 50%
of the outstanding voting securities are present or represented by proxy;
or (2) of more than 50% of outstanding voting securities, whichever is
less. For this purpose, abstentions and "broker non-votes" will have the
same effect as votes cast against the proposal.
THE DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS,
UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSED
AMENDMENT TO INCREASE THE BASE FEE COMPONENT OF THE MANAGEMENT FEE.
Proposal 2: Approval of Amended and Restated Articles of
Incorporation of the Fund
At a meeting held on January 28, 1997, the Board of
Directors, including all of the Non-Interested Directors, unanimously
adopted Amended and Restated Articles of Incorporation of the Fund (the
"Proposed Charter"). As discussed in greater detail below, the Fund's
current Articles of Incorporation (the "Current Charter"), originally
adopted in 1958, contain certain provisions which are duplicative of
provisions applicable to the Fund under the 1940 Act or are described in
the Fund's Prospectus and Statement of Additional Information ("SAI") as
fundamental investment policies. Accordingly, as discussed in further
detail below, the Board is of the view that it is potentially confusing
and poses potential uncertainties for the Fund's charter to contain such
provisions as well. Moreover, a more recent typical charter for an open-
end investment company incorporated in Maryland would not contain such
provisions. Importantly, the Board believes that these changes will
result in no reduction in the protections afforded to stockholders and do
not modify or eliminate any of the Fund's investment policies. The
Proposed Charter, marked to show the proposed changes, is attached hereto
as Exhibit B. The differences between the Proposed Charter and the
Current Charter are discussed below.
First, the Fund proposes to eliminate from Article THIRD the
list of restrictions on the Fund's investment activities. This list is
essentially a restatement of the Fund's fundamental investment policies
which are contained in the Fund's Prospectus and SAI and which can only be
changed by stockholder vote. Many of these policies, as contained in the
Current Charter, are written in a slightly different form than their
counterparts in the Prospectus and SAI, resulting in ambiguities and
interpretive uncertainties throughout. Any substantive change to any of
these fundamental policies will still require a subsequent Board and
shareholder vote. The Board did consider that, as a consequence of the
elimination of the fundamental policies from the Current Charter, the more
liberal voting provisions of the 1940 Act would apply in the event a
change was sought to any of the fundamental policies, rather than the
stockholder voting provisions provided under the Current Charter. To
<PAGE>
amend the Current Charter, the vote of a majority of the outstanding
shares entitled to vote is required. The 1940 Act requires, for approval
of an amendment to a fundamental policy, the vote of the lesser of: (a)
67% or more of the shares present at a stockholders' meeting, if more than
50% of the then outstanding shares are present or represented by proxy at
such meeting; and (b) more than 50% of the outstanding shares of the Fund.
Nonetheless, for the reasons discussed above, the Board believes it is in
the best interests of the Fund to eliminate this list of restrictions from
the Current Charter.
Second, the Fund proposes to eliminate from Article SEVENTH
the section limiting the ability of the Fund to engage in transactions
with affiliated and other related parties.<F5> The Board is of the
view that the "affiliated transaction" prohibitions contained in Section
17 of the 1940 Act provide adequate protection to stockholders and it is
therefore unnecessary to further restrict the Fund to the extent of
Article SEVENTH. Section 17 prohibits any "affiliated person" of a
registered investment company or any person affiliated with such person,
as such terms are defined in the 1940 Act, to act as a principal: (i) in
the sale or purchase of any security to such registered investment company
or a company controlled by such registered investment company; (ii) to
borrow money from such registered investment company; or (iii) to effect
any transaction in which such registered investment company is joint
participant with such person. The limitations contained in this section
of the Current Charter go well beyond the 1940 Act restrictions in this
area. In addition, the Fund has already adopted a fundamental policy
which prohibits the Fund from buying securities from or selling
securities, as a principal, to any of its officers, directors, employees,
investment manager or distributor. Most charters, as well as a fund's
fundamental policies, do not contain affiliated party restrictions under
the theory that such provisions are already contained in the 1940 Act.
The provisions of this section of the Current Charter also
provide that, subject to the limitations discussed above and with proper
disclosure to the Board, any director or officer of the Fund (or any
entity with whom such director or officer is associated) may have a
pecuniary or other interest in a contract or transaction with the Fund.
In addition, this section of the Current Charter provides that the Fund
can enter into a management contract and do business with Lehman
Brothers.<F6> The Fund proposes to eliminate these provisions of the
Current Charter because Maryland law permits such relationships without
requiring such provisions to be explicitly stated in a fund's charter, and
therefore, the Board is of the view that these provisions are unnecessary.
Third, this section of the Current Charter also provides that
the Fund's name is granted through permission of Lehman Brothers. From
the date of incorporation of the Fund until May 1, 1984, the Fund's name
was The One William Street Fund, Inc. As the Fund is no longer advised by
LEMCO or affiliated with Lehman Brothers, the Board recommends that these
stale references to Lehman Brothers, "One William Street" and "William
Street" be removed.
<PAGE>
Required Vote
The affirmative vote of the holders of a majority of the
total number of outstanding shares of the Fund's Common Stock entitled to
vote is required for approval of the amendment to the Fund's Charter.
Accordingly, abstentions and "broker non-votes" will have the same effect
as a vote cast against the amendment.
THE DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS,
UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE ADOPTION OF THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF THE FUND.
Proposal 3: Approval of an Amendment
to the Fund's Fundamental Investment Policy Regarding
the Borrowing of Money to Meet Redemption Requests
At a meeting held on January 28, 1997, the Board of
Directors, including all of the Non-Interested Directors, unanimously
approved an amendment to the Fund's fundamental investment policy
regarding the borrowing of money, which currently permits the Fund to
borrow as a temporary measure for extraordinary or emergency purposes in
amount up to 5% of its total assets taken at cost or value, whichever is
less. The proposed amendment to this policy will permit the Fund to also
borrow money to meet redemption requests. The amount that the Fund will
be permitted to borrow, up to 5% of its total assets taken at the lesser
of cost or value, will not change. The Board is of the view that the
current policy is more limiting than necessary and should be amended to
provide the Fund with an appropriate level of flexibility to meet
redemption requests. Therefore, the Board believes the amendment is in
the best interests of the Fund and its stockholders. The following is the
text of the current policy and the proposed policy, with the additional
language underlined.
Current Fundamental Policy
The Fund may not "borrow money, except as a temporary measure
for extraordinary or emergency purposes and then only from banks
and in an amount not to exceed 5% of its total assets taken at
cost or value, whichever is less, or mortgage or pledge any of its
assets and except that for purposes of this restriction,
collateral arrangements with respect to the writing of options on
stocks and stock indices, the purchase and sale of futures
contracts and options on futures contracts, and forward currency
contracts are not deemed a pledge of assets or a borrowing of
money."
Proposed Fundamental Policy
The Fund may not "borrow money, except (i) in order to meet
redemption requests or (ii) as a temporary measure for
extraordinary or emergency purposes and then only from banks and,
in the case of both (i) and (ii), in an aggregate amount not to
<PAGE>
exceed 5% of its total assets taken at cost or value, whichever is
less, or mortgage or pledge any of its assets and except that for
purposes of this restriction, collateral arrangements with respect
to the writing of options on stocks and stock indices, the
purchase and sale of futures contracts and options on futures
contracts, and forward currency contracts are not deemed a pledge
of assets or a borrowing of money."
Required Vote
The affirmative vote of: (a) 67% or more of the shares of
the Fund present at the meeting, if more than 50% of the then outstanding
shares are present or represented by proxy at the Meeting; or (b) more
than 50% of the then outstanding shares of the Fund, whichever is less, is
required for approval of the amendment to the Fund's fundamental
investment policies. For this purpose, abstentions and "broker non-votes"
will have the same effect as votes cast against the amendment.
THE DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS,
UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSED
AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING THE
BORROWING OF MONEY.
Proposal 4: Approval of an Amendment to the Fund's Fundamental Investment
Policy Regarding the Lending of Portfolio Securities
At a meeting held on January 28, 1997, the Board of
Directors, including all of the Non-Interested Directors, unanimously
approved an amendment to the Fund's fundamental investment policy
regarding the lending of securities, which currently permits the Fund to
lend portfolio securities in an amount up to 10% of its total assets. The
proposed amendment would permit the Fund to lend portfolio securities in
an amount up to 33 1/3% of its total assets.
In recent years, it has become a common practice among mutual
fund complexes to establish securities lending programs with brokerage
firms or other financial institutions as a mechanism to generate
additional income for a fund and, in turn, to increase return to
shareholders. The Securities and Exchange Commission ("SEC") has imposed
certain limitations on the securities lending activities of mutual funds
in an effort to minimize potential risks. For example, the SEC requires
that the collateral provided to a fund by the entity borrowing the
securities be maintained at a level equal to at least 100% of the market
value of the securities loaned, and be marked to market daily. Collateral
must take the form of cash, U.S. government obligations or letters of
credit. Moreover, it is important to note that the lending fund retains
the benefits of owning the securities, including the voting rights and the
right to receive dividends or interest payments.
Although the Fund does not currently engage in any securities
lending, it may do so in the future. While the Fund's current policy
grants the flexibility to lend securities with a value of up to 10% of the
Fund's total assets, the SEC takes the position that a fund may lend
<PAGE>
securities in an amount up to 33 1/3% of its assets and it is typical for
funds to have the flexibility to lend up to this amount. The Board is of
the view that a limit of 10% would not permit the Fund to effectively
engage in a securities lending program and, therefore, recommends that the
limit be increased to 33 1/3%.
As quoted below, the Fund's SAI contains a description of the
procedure the Fund would follow in connection with the lending of its
portfolio securities. This description is part of the Fund's fundamental
policy and the Board proposes to make the description non-fundamental.
While the procedure described in the SAI is, for the most part,
representative of the general procedure funds follow in conducting
securities lending arrangements, the Board is of the opinion that it no
longer continues to make sense to require stockholder approval to change
language mainly intended as a description of current market practice. As
an example of the difficulties in treating this language as fundamental,
the disclosure currently states that the borrower will deposit cash as
collateral. As noted above, funds have the flexibility under positions
adopted by the staff of the SEC to also accept U.S. government obligations
or enter into letters of credit to satisfy collateral requirements. The SAI
description also indicates that the borrower may not be affiliated, directly
or indirectly, with the Fund. The Fund is not proposing to change the
fundamental status of this affiliated restriction. In addition, before
actually commencing any securities lending program, the Fund will adopt
procedures to comply with SEC requirements and to generally ensure adequate
safeguards are in place including, among other things, requirements as to the
creditworthiness of counterparties. The text of the current policy and the
proposed policy, with the modified language underlined, follows:
Current Fundamental Policy
The Fund may not "lend its funds or other assets to any other
person other than through the purchase of liquid debt securities
pursuant to the Fund's investment policies, except that (a) the
Fund may lend its portfolio securities as described in the
Statement of Additional Information and (b) the Fund may enter
into repurchase agreements in an amount up to an aggregate of 25%
of its total assets."
The SAI states the following: "The procedure for the lending
of securities will include the following features and conditions.
The borrower of the securities will deposit cash with the Fund in
an amount equal to a minimum of 100% of the market value of the
securities lent. The Fund will invest the collateral in short-
term debt securities or cash equivalents and earn the interest
thereon. A negotiated portion of the income so earned may be paid
to the borrower or the broker who arranged the loan. If the
deposit drops below the required minimum at any time, the borrower
may be called upon to post additional cash. If the additional
cash is not paid, the loan will be immediately due and the Fund
may use the collateral or its own cash to replace the securities
by purchase in the open market charging any loss to the borrower.
These will be "demand" loans and may be terminated by the Fund at
<PAGE>
any time. [The] Fund will receive any dividends and interest paid
on the securities lent and the loans will be structured to assure
that the Fund will be able to exercise its voting rights on the
securities. Such loans will be authorized only to the extent that
the receipt of income from such activity would not cause any
adverse tax consequences to [the] Fund's shareholders and only in
accordance with applicable rules and regulations. The borrowers
may not be affiliated, directly or indirectly, with [the] Fund."
Proposed Fundamental Policy
The Fund may not "lend its funds or other assets to any other
person other than through the purchase of liquid debt securities
pursuant to the Fund's investment policies, except that (a) the
Fund may lend its portfolio securities in an amount up to 33 1/3%
of its total assets, provided that the borrower may not be
affiliated, directly or indirectly, with the Fund and (b) the Fund
may enter into repurchase agreements in an amount up to an
aggregate of 25% of its total assets."
Required Vote
The proposed amendment to the Fund's fundamental investment
policies must be approved by a vote of a majority of the outstanding
voting securities of the Fund. As defined in the 1940 Act, the vote of a
majority of the outstanding voting securities of the Fund means the vote of:
(a) 67% or more of the shares of the Fund present at the meeting, if more than
50% of the then outstanding shares are present or represented by proxy at the
Meeting; or (b) more than 50% of the then outstanding shares of the Fund,
whichever is less, is required for approval of the amendment to the Fund's
fundamental investment policies. For this purpose, abstentions and "broker
non-votes" will have the same effect as votes cast against the amendment.
THE DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS,
UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSED
AMENDMENT TO THE FUNDAMENTAL INVESTMENT POLICY REGARDING THE LENDING OF
PORTFOLIO SECURITIES.
Proposals to be Submitted by Stockholders
The Fund does not generally hold an Annual Meeting of
Stockholders. Stockholders wishing to submit proposals for inclusion in a
proxy statement for a subsequent stockholders' meeting should send their
written proposals to the Secretary of the Fund at the address set forth on
the cover of the proxy statement.
In addition, the Fund has retained D.F. King & Co., Inc., a
proxy solicitation firm, to assist in the solicitation of the proxy vote.
It is anticipated that D.F. King & Co., Inc. will be paid approximately
$[____________] for such solicitation services.
<PAGE>
Expenses of Proxy Solicitation
The costs of preparing, assembling and mailing material in
connection with this solicitation of proxies will be borne by [
]. Proxies may also be solicited personally by officers of the Fund and
by regular employees of Salomon Brothers Asset Management Inc or its
affiliates, or other representatives of the Fund by telephone or
telegraph, in addition to the use of the mails. Brokerage houses, banks
and other fiduciaries may be requested to forward proxy solicitation
material to their principals to obtain authorization for the execution of
proxies, and they will be reimbursed by the Fund for out-of-pocket
expenses incurred in this connection.
Other Business
The Board of Directors of the Fund does not know of any other
matter which may come before the Meeting. If any other matter properly
comes before the Meeting, it is the intention of the persons named in the
proxy to vote the proxies in accordance with their judgment on that
matter.
Other Information
The Fund's Annual Report containing financial statements for
the fiscal year ended December 31, 1996 is available free of charge, by
writing to the Fund c/o Salomon Brothers Asset Management Inc at the
address listed on the front cover, or by calling 1-800-SALOMON.
March 6, 1997
____________________
[FN]
<F1> Lipper is a nationally recognized organization that reports on
open- and closed-end fund total return performance. Lipper selects
comparison groups based on the following parameters: (1) fund
type, (2) similarity of investment objective, (3) load structure,
(4) asset level comparability, (5) expense components or structure
and (6) primary channel of distribution. The Fund's Class A and Class
O shares were included in one comparison group consisting of these two
Classes along with fourteen other open-end investment companies or
classes of open-end investment companies. The Fund's Class B and
Class C shares were included in another comparison group consisting
of these two Classes along with fourteen other open-end investment
companies or classes of open-end investment companies. With respect
to comparing the Fund's total expenses, all four Classes were
included in an "expense universe" consisting of all open-end
growth and income investment companies, as classified by Lipper,
with average net assets ranging between $250 million and $815
million.
<F2> Lipper calculates fund rankings based on total returns. Total returns
are calculated based on changes in net asset value and assume the
reinvestment of dividends and distributions at the then-current net
<PAGE>
asset value. Ranking results change monthly. The performance
information shown relates only to the Fund's Class O shares, which are
available only to existing Class O shareholders. Commencing in
February 1995, the Fund also began offering Class A, Class B and Class
C shares, each of which bears certain additional expenses beyond those
borne by Class O shares and each of which are sold subject to a
front-end or contingent deferred sales charge. These expenses and
potential charges would reduce the returns described above for holders
of the Fund's other classes of shares. All fees and expenses for
each class of shares are described in the Fund's prospectus.
<F3> Morningstar ratings reflect risk-adjusted performance, are subject
to change monthly and are calculated from the subject fund's
three-, five- and ten- year average annual total returns in excess of
the return on 90-day Treasury bills. Average annual total returns
include changes in share price and reinvestment of dividends and
distributions. Ten percent of the funds in an investment category
receive five stars.
<F4> Stockholders of SBF are being asked to approve the same
increase in the Base Fee component as described herein.
<F5> In general, these restrictions prohibit the Fund, acting as a
principal, to purchase or sell securities to (i) any officer,
director or employee of the Fund, (ii) any partnership of which
any of these parties is a member, (iii) any corporation of which
any of these parties is an officer, director or trustee, (iv) any
organization providing managerial, supervisory or distributing
services to the Fund, (v) any officer, director, partner, trustee
or employee or shareholder of any organization described in (iv)
above and (vi) any corporation of which such person described in
(v) above or organization described in (iv) above is an officer,
director or trustee.
<F6> On May 1, 1990, SBAM purchased substantially all of the assets of
Lehman Management Co., Inc. ("LEMCO"), the previous investment
adviser to the Fund and changed the Fund's name from Lehman
Investors Fund to the Salomon Brothers Investors Fund Inc.
<PAGE>
EXHIBIT A
MANAGEMENT CONTRACT
SALOMON BROTHERS INVESTORS FUND INC
Seven World Trade Center
New York, New York 10048
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
____________, 1997
Dear Sirs:
We herewith confirm our agreement with you as follows:
We are engaged in the business of investing and reinvesting our
assets in securities of the type and in accordance with the limitations
specified in our Articles of Incorporation, By-Laws, Registration Statement
filed with the Securities and Exchange Commission under the Investment
Company Act of 1940, and any representation made in our Prospectus. We have
previously forwarded to you copies of the documents listed above and will
from time to time furnish you with any amendments thereof.
We hereby employ you to manage the investing and reinvesting of our
assets as above specified, and, without limiting the generality of the
foregoing, to provide management and other services specified below.
You will provide us, at your expense, with office facilities,
including space, furniture and equipment, and all personnel reasonably
necessary for our operations. Other than as herein specifically indicated,
you will not be responsible for any of our expenses. Specifically you will
not be responsible, except to the extent of the reasonable compensation of
our employees whose services may be involved, for our legal and auditing
expenses; taxes and governmental fees and any membership dues; fees of
custodian, transfer agent and registrar, if any; expense of preparing share
certificates and other expenses of issue, sale, underwriting, distribution,
redemption or repurchase of our shares; expenses of registering or qualifying
securities for sale; expense of preparing and distributing reports, notices
and dividends to stockholders; cost of stationery; cost of stockholders' and
other meetings; compensation of our Board of Directors and its Executive
Committee; and traveling expenses of officers, directors and employees, if
any. Should you determine that services which would ordinarily be rendered
by our employees at our office can be better rendered by some other outside
agency, you shall bear the costs of employing that agency.
As manager of our portfolio, it shall be your duty to make
purchases and sales of securities on our behalf in accordance with your best
judgment and within the investment objectives and restrictions set forth in
our Articles of Incorporation, By-Laws, Registration Statement and
Prospectus, the Investment Company Act of 1940, the provisions of the
<PAGE>
Internal Revenue Code with respect to regulated investment companies, and
such policy decisions as the Board of Directors shall from time to time
adopt. You will further advise our Board of Directors, at such intervals as
it may require, of purchases and sales during such intervals and will, when
requested by the Board of Directors, supply the reasons and considerations
that prompted your decisions.
It is understood that you will from time to time employ or
associate with you such persons as you believe to be particularly fitted to
assist you in the execution of your performance of this agreement, the
compensation of such persons to be paid by you. No obligation may be
incurred on our behalf in any such respect. During the continuance of this
agreement you will provide persons satisfactory to our Board of Directors to
serve us as officers and employees, if elected or appointed as such. These
shall be a president, one or more vice presidents, a secretary, a treasurer
and such additional officers and employees as may reasonably be necessary for
the conduct of our business, and you agree to pay the reasonable compensation
of all such persons.
We shall expect of you, and you will give us the benefit of, your
best judgment and efforts in rendering these services to us, and we agree as
an inducement to your undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect,
or purport to protect, you against any liability to us or to our stockholders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder.
In consideration of the foregoing we will pay you quarterly,
promptly after the last day of March, June, September and December in each
year, a fee consisting of the following percentages of the average daily
closing value of our net assets during the quarterly period ended on such
date: .650% on the first $350,000,000 of such assets' value, .550% on the
next $150,000,000 of such assets' value, .525% on the next $250,000,000 of
such assets' value, .500% on the next $250,000,000 of such assets' value
and .450% on such assets' value in excess of $1,000,000,000; provided that,
upon any termination of this agreement before the end of any quarter such
compensation for the period from the end of the last quarter ending prior
to such termination to the date of termination shall be prorated according
to the proportion which such period bears to a full quarter-year period
and shall be payable promptly after the date of termination. For this
purpose the value of our net assets shall be computed in the manner
specified in our Articles of Incorporation for the computation of the
value of such net assets in connection with the determination of the
net asset value of our shares.
Notwithstanding the foregoing, if the aggregate expenses (excluding
interest, taxes, brokerage commissions and other portfolio transaction
expenses and any extraordinary expenses, but including the management fee)
incurred by, or allocated to, us in any fiscal year shall exceed the most
stringent expense limitations applicable to us imposed by state securities
<PAGE>
laws or regulations thereunder, as such limitations may be raised or lowered
from time to time, you shall reimburse us for such excess. Your
reimbursement obligation will be limited to the amount of fees you received
under this agreement during the period in which such expense limitations were
exceeded, unless otherwise required by applicable laws or regulations. With
respect to portions of a fiscal year in which this contract shall be in
effect, the foregoing limitations shall be prorated according to the
proportion which that portion of the fiscal year bears to the full fiscal
year. Any such payments required to be made shall be made once a year
promptly after the end of our fiscal year.
You will (i) not make a short sale of any share of our capital
stock, (ii) not purchase any such share otherwise than for investment and
(iii) advise us of any sale of such share made by you less than two months
after the date of acquisition.
This agreement shall remain in effect for twelve months from the
date hereof and thereafter shall continue automatically for successive
annual periods, provided that such continuance is specifically approved at
least annually (i) by the vote of a majority of our directors who are not
parties to this agreement or "interested persons" (as defined in the
Investment Company Act of 1940) of any such party, cast in person at a
meeting called for the purpose of voting on such approval and (ii) either by
the vote of (x) the Board of Directors or (y) a majority of our outstanding
voting securities (as so defined). This agreement may be terminated at any
time, without the payment of any penalty, by vote of a majority of our
outstanding voting securities (as so defined), or by a vote of a majority of
our entire Board of Directors, on sixty days' written notice to you, or by
you on sixty days' written notice to us.
This agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you. This agreement shall terminate
automatically in the event of its assignment (as defined in the Investment
Company Act of 1940) by you.
Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any parent, subsidiary or affiliate of yours, or the right of
any employees of yours or any of them who may also be a director, officer or
employee of ours, to engage in any other business or to devote time and
attention to the management of other aspects of any other business, whether
of a similar or dissimilar nature, or to render services of any kind to any
other corporation, firm, individual or association.
<PAGE>
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
SALOMON BROTHERS INVESTORS
FUND INC
By: __________________________
ACCEPTED:
SALOMON BROTHERS ASSET
MANAGEMENT INC
By: ________________________
<PAGE>
EXHIBIT B
SALOMON BROTHERS INVESTORS FUND INC
ARTICLES OF AMENDMENT AND RESTATEMENT
SALOMON BROTHERS INVESTORS FUND INC, a Maryland corporation, having
its principal office in Baltimore City, Maryland (which is hereinafter called
the "Corporation"), hereby certifies to the State Department of Assessments
and Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended and
restated in its entirety to read as follows:
SALOMON BROTHERS INVESTORS FUND INC
RESTATED ARTICLES OF INCORPORATION
THIS IS TO CERTIFY:
FIRST: We, the subscribers, Eastman Birkett, H. Day Brigham, Jr.
and Benjamin C. Milner, the post office address of all of whom is 120
Broadway, New York 5, N.Y. all being of full legal age, do under and by
virtue of the General Laws of the State of Maryland authorizing the formation
of corporations, associate ourselves with the intention of forming a
corporation.
SECOND: The name of the corporation (hereinafter called the
Corporation) is
Salomon Brothers Investors Fund Inc
THIRD: The purpose or purposes for which the Corporation is formed
and the business or objects to be transacted, carried on and promoted by it,
are as follows:
(1) To hold, invest and reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, assign, negotiate,
transfer, exchange or otherwise dispose of or turn to account or realize
upon, securities (which term "securities" shall for the purpose of this
Article, without limitation of the generality thereof, be deemed to include
any stocks, shares, bonds, debentures, notes, mortgages or other obligations
and any certificates, receipts, warrants or other instruments representing
rights to receive, purchase or subscribe for the same, or evidencing or
representing any other rights or interests therein, or in any property or
assets) created or issued by any persons, firms, associations, corporations,
syndicates, combinations, organizations, governments or subdivisions thereof;
and to exercise, as owner or holder of any securities, all rights, powers and
privileges in respect thereof; and to do any and all acts and things for the
preservation, protection, improvement and enhancement in value of any and all
such securities;
<PAGE>
(2) To issue and sell shares of its own capital stock in such
amounts and on such terms and conditions, for such purposes and for such
amount or kind of consideration (including, without limitation thereto,
securities) now or hereafter permitted by the laws of Maryland and by these
Articles of Incorporation, as its Board of Directors may determine.
(3) To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote or consent of the
stockholders of the Corporation) shares of its capital stock, in any manner
and to the extent now or hereafter permitted by the laws of said State and by
these Articles of Incorporation.
(4) To conduct its business in all its branches at one or more
offices in Maryland and elsewhere in any part of the world, without
restriction or limit as to extent.
(5) To carry out all or any of the foregoing objects and purposes
as principal or agent, and alone or with associates or to the extent now or
hereafter permitted by the laws of Maryland, as a member of, or as the owner
or holder of any stock of, or shares of interest in, any firm, association,
corporation, trust or syndicate, and in connection therewith to make or enter
into such deeds or contracts with any persons, firms, associations,
corporations, syndicates, governments or subdivisions thereto and to do such
acts and things and to exercise such powers, as a natural person could
lawfully make, enter into, do or exercise.
(6) To do any and all such further acts and things and to exercise
any and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out or
attainment of all or any of the foregoing purposes of objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to, or
inference from, the terms of any other clause of this or any other Articles
of these Articles of Incorporation, and shall each be regarded as independent
and construed as powers as well as objects and purposes, and the enumeration
of specific purposes, objects and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or the general powers of
the Corporation now or hereafter conferred by the laws of the State of
Maryland nor shall the expression of one thing be deemed to exclude another,
though it be of like nature, not expressed; provided, however, that the
Corporation shall not have the power to carry on within the State of Maryland
any business whatsoever the carrying on of which would preclude it from being
classified as an ordinary business corporation under the laws of said State;
nor shall it carry on any business, or exercise any powers, in any other
state, territory, district or country except to the extent that the same may
lawfully be carried on or exercised under the laws thereof.
FOURTH: The post office address of the place at which the
principal office of the Corporation in the State of Maryland will be located
is 32 South Street, Baltimore, Maryland 21202.
The Corporation's resident agent is the Corporation Trust
Incorporated, whose post office address is 32 South Street, Baltimore,
Maryland 21202. Said resident agent is a corporation of the State of
Maryland.
<PAGE>
FIFTH: (1) The total number of shares of stock of all classes
which the Corporation initially has authority to issue is 50,000,000 shares
of capital stock (par value $1.00 per share), amounting in aggregate par
value to $50,000,000. All of such shares are initially classified as "Common
Stock". The Common Stock (unless otherwise specified in the articles
supplementary designating such Class) shall initially have four classes of
shares, which shall be designated "Class A Common Stock", "Class B Common
Stock", "Class C Common Stock" and "Class O Common Stock" each consisting, at
a maximum and until further changed, of the lesser of (x) 50,000,000 shares
or (y) the number of shares that could be issued by issuing all of the shares
of Common Stock currently or hereafter classified less the total number of
shares of Common Stock of all other Classes then issued and outstanding. Any
Class of Common Stock shall be referred to herein individually as a "Class"
and collectively, together with any further class or classes of Common Stock
from time to time established, as the "Classes".
(2) Unless otherwise prohibited by law, so long as the Corporation
is registered as an open-end company under the Investment Company Act, the
Board of Directors shall have the power and authority, without the approval
of the holders of any outstanding shares, to increase or decrease the number
of shares of capital stock or the number of shares of capital stock of any
class that the Corporation has authority to issue.
(3) The Board of Directors may classify or reclassify any unissued
shares of capital stock (whether or not such shares have been previously
classified or reclassified) from time to time by setting or changing in any
one or more respects the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications, or terms
or conditions of redemption of such shares of stock.
(4) The following is a description of the preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the shares of
Common Stock of the Corporation (unless provided otherwise by the Board of
Directors with respect to any such additional Classes at the time it is
established and designated):
(a) Dividends and Distributions. Dividends and capital gains
distributions on shares of Common Stock may be paid with such frequency,
in such form and in such amount as the Board of Directors may determine
by resolution adopted from time to time, or pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Board of Directors may determine. All dividends and distributions
on shares of Common Stock shall be distributed to the holders of Common
Stock held by such holders at the date and time of record established by
the payment of such dividends or distributions, except that in
connection with any dividend or distribution program or procedure, the
Board of Directors may determine that no dividend or distribution shall
be payable on shares as to which the stockholder's purchase order and/or
payment have not been received by the time or times established by the
Board of Directors under such program or procedure.
Dividends and distributions may be paid in cash, property or
additional shares of Common Stock of the same or another Class, or a
combination thereof, as determined by the Board of Directors or pursuant
<PAGE>
to any program that the Board of Directors may have in effect at the
time for the election by stockholders of the form in which dividends or
distributions are to be paid. Any such dividend or distribution paid in
shares shall be paid at the current net asset value thereof.
(b) Voting. On each matter submitted to a vote of the
stockholders, each holder of shares of Common Stock shall be entitled to
one vote for each share standing in his name on the books of the
Corporation, irrespective of the Class thereof, and all shares of all
Classes shall vote as a single class ("Single Class Voting"); provided,
however, that (i) as to any matter with respect to which a separate vote
of any Class is required by the Investment Company Act or by the
Maryland General Corporation Law, such requirement as to a separate vote
by that Class shall apply in lieu of Single Class Voting, (ii) in the
event that the separate vote requirement referred to in clause (i) above
applies with respect to one or more Classes, then subject to clause
(iii) below, the shares of all other Classes shall vote as a single
class and (iii) as to any matter which does not affect the interest of a
particular Class only the holders of shares of the one or more affected
Classes shall be entitled to vote.
(c) Redemption by Stockholders. Each holder of shares of Common
Stock shall have the right at such times as may be permitted by the
Corporation to require the Corporation to redeem all or any part of his
shares, at a redemption price per share equal to the net asset value per
share of Common Stock next determined after the shares are properly
tendered for redemption, less such redemption fee or sales charge, if
any, as may be established by the Board of Directors in its sole
discretion. Payment of the redemption price shall be in cash; provided,
however, that if the Board of Directors determines, which determination
shall be conclusive that conditions exist which make payment wholly in
cash unwise or undesirable, the Corporation may, to the extent and in
the manner permitted by the Investment Company Act, make payment wholly
or partly in securities or other assets, at the value of such securities
or assets used in such determination of net asset value.
Notwithstanding the foregoing, the Corporation may postpone payment of
the redemption price and may suspend the right of the holders of shares
of Common Stock to require the Corporation to redeem shares during any
period or at any time when and to the extent permissible under the
Investment Company Act.
(d) Redemption by Corporation. The Board of Directors may cause
the Corporation to redeem at their net asset value the shares of any
Common Stock held in an account having, because of redemptions or
exchanges, a net asset value on the date of the notice of redemption
less than a minimum investment specified by the Board of Directors from
time to time in its sole discretion, provided that prior written notice
of the proposed redemption has been given to the holder of any such
account by mail, postage prepaid, at the address contained in the books
and records of the Corporation and such holder has been given an
opportunity to purchase the required value of additional stock.
(e) Net Asset Value Per Share. The net asset value per share of
any Class shall be the quotient obtained by deciding the value of the
<PAGE>
net assets of that Class being the value of the securities and other
assets attributable to that Class less the liabilities attributable to
that Class by the total number of shares of that Class outstanding, all
as determined by or under the direction of the Board of Directors in
accordance with generally accepted accounting principles and the
Investment Company Act. Subject to the applicable provisions of the
Investment Company Act, the Board of Directors in its sole discretion,
may prescribe and shall set forth in the By-Laws of the Corporation or
in a duly adopted resolution of the Board of Directors such bases and
times for determining the value of the assets attributable to, and the
net asset value per share and outstanding shares of each Class, or the
net income attributable for such shares as the Board of Directors deems
necessary or desirable. The Board of Directors shall have full
discretion, to the extent not inconsistent with the Maryland General
Corporation Law and the Investment Company Act to determine what terms
shall be treated as income and which items as capital and whether any
item of expense shall be charged to income or capital. Each such
determination and allocation shall be conclusive and binding for all
purposes.
(f) Equality. All shares of each particular Class shall represent
an equal proportionate interest in the assets attributable to that Class
(subject to the liabilities of that Class), and each share of any
particular Class shall be equal to each other share of that Class. The
Board of Directors may from time to time divide or combine the shares of
any particular Class into a greater or lesser number of shares of that
Class without thereby changing the proportionate interest in the assets
attributable to that Class or in any way affecting the rights of holders
of shares of any other Class.
(5) All Classes of Common Stock of the Corporation shall represent
the same interest in the Corporation and have identical voting, dividend,
liquidation, and other rights with any other shares of Common Stock;
provided, however, that notwithstanding anything in the charter of the
Corporation to the contrary:
(a) The Class A Common Stock, Class B Common Stock and Class C
Common Stock shares shall be subject to such front-end sales loads
and/or contingent deferred sales charges as may be established from time
to time by the Board of Directors in accordance with the Investment
Company Act and applicable rules and regulations of the National
Association of Securities Dealers, Inc.
(b) The Class O Common Stock shares shall not be subject to
front-end sales loads or contingent deferred sales charges.
(c) Expenses related solely to a particular Class (including,
without limitation, expenses under a Rule 12b-1 plan and administrative
expenses under an administration or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in the manner determined by the Board of
Directors) in the net asset value, dividends, distribution and
liquidation rights of the shares of that Class.
(d) As to any matter with respect to which a separate vote of any
Class is required by the Investment Company Act or by the Maryland
<PAGE>
General Corporation Law (including, without limitation, the approval of
any plan, agreement or other arrangement referred to in subsection
(5)(c) above), such requirement as to a separate vote by that Class
shall apply in lieu of Single Class Voting, and if permitted by the
Investment Company Act or the Maryland General Corporation Law, the
Classes shall vote together as a single class on any such matter which
shall have the same effect on each Class. As to any matter which does
not affect the interest of a particular Class, only the holders of
shares of the affected Classes shall be entitled to vote.
(e) On the sixth anniversary of the first business day of the
month following the month in which Class B Common Stock shares were
purchased by a stockholder, such Class B Common Stock shares (as well as
a pro rata portion of any Class B Common Stock shares purchased through
the reinvestment of dividends and other distributions paid in respect of
all Class B Common Stock shares held by such stockholder) shall
automatically convert to Class A Common Stock shares; provided, however,
that such conversion shall be subject to the continuing availability of
an Internal Revenue Service ruling and an opinion of counsel to the
effect that the conversion of the Class B Common Stock shares does not
constitute a taxable event under federal income tax law. The Board of
Directors, in its sole discretion, may suspend the conversion of Class B
Common Stock shares if such ruling and opinion are no longer available.
(f) On the tenth anniversary of the first business day of the
month following the month in which Class C Common Stock shares were
purchased by a stockholder, such Class C Common Stock shares (as well as
a pro rata portion of any Class C Common Stock shares purchased through
the reinvestment of dividends and other distributions paid in respect of
all Class C Common Stock shares held by such stockholder) shall
automatically convert to Class A shares; provided, however, that such
conversion shall be subject to the continuing availability of an
Internal Revenue Service ruling and an opinion of counsel to the effect
that the conversion of the Class C Common Stock shares does not
constitute a taxable event under federal income tax law. The Board of
Directors, in its sole discretion, may suspend the conversion of Class C
Common Stock shares if such ruling and opinion are no longer available.
(g) The number of shares of the Class A Common Stock into which
the Class B or Class C Common Stock is converted pursuant to subsections
(5)(e) and (5)(f) above shall equal the number (including for these
purposes fractional shares) obtained by dividing the net asset value per
share of the Class B or Class C Common Stock, as the case may be, for
purposes of sales and redemptions on the conversion date by the net
asset value per share of the Class A Common Stock for purposes of sales
and redemptions on the conversion date.
(6) The Corporation may issue and sell fractions of shares of
capital stock having pro rata all the rights of full shares, including,
without limitation, the right to vote and to receive dividends, and wherever
the words "share" or "shares" are used in the charter or By-Laws of the
Corporation, they shall be deemed to include fractions of shares where the
context does not clearly indicate that only full shares are intended.
<PAGE>
(7) The Corporation shall not be obligated to issue certificates
representing shares of any Class of capital stock. At the time of issue or
transfer of shares without certificates, the Corporation shall provide the
stockholder with such information as may be required under the Maryland
General Corporation Law.
(8) All persons who shall acquire stock in the Corporation shall
acquire the same subject to the provisions of these Articles of
Incorporation.
SIXTH: The number of Directors of the Corporation shall be ten, and the
names of those who are now serving as Directors of the Corporation until the
next annual meeting or until their successors are duly chosen and qualified
are as follows:
Charles F. Barber Clifford M. Kirtland, Jr.
Andrew Breech Robert Lawless
Carol L. Colman Louis Mattis
William R. Dill Robert S. Salomon, Jr.
Michael S. Hyland Thomas F. Schlafly
However, the By-Laws of the Corporation may fix the number of Directors at a
number greater or less than that named in these Articles of Incorporation,
provided that in no case shall the number of Directors be less than three and
may authorize the Board of Directors, by the vote of a majority of the entire
Board of Directors, to increase or decrease the number of Directors fixed by
these Articles of Incorporation or by the By-Laws within a limit specified in
the By-Laws and to fill the vacancies created by any such increase in the
number of Directors. Unless otherwise provided by the By-Laws of the
Corporation, the Directors of the Corporation need not be stockholders
therein.
SEVENTH: The following provisions are hereby adopted for the purpose
of defining, limiting and regulating the powers of the Corporation and of the
Directors and stockholders.
(1) The By-Laws of the Corporation may divide the
Directors of the Corporation into classes and prescribe the tenure of office
of the several classes, but no class shall be elected for a period shorter
than that from the time of the election following the divisions into classes
until the next annual meeting and thereafter for a period shorter than the
interval between annual meetings or for a longer period than [five] years,
and the term of office of at least one class shall expire each year.
Notwithstanding the foregoing, no such division into classes shall be made
prior to the first annual meeting of stockholders of the Corporation.
(2) The holders of shares of the capital stock of the
Corporation shall have the right to inspect the records, documents, accounts
and books of the Corporation, subject to reasonable regulations of the Board
of Directors, not contrary to Maryland law, as to whether and to what extent,
and at what times and places, and under what conditions and regulations, such
right shall be exercised.
(3) Any Director, or any officer elected or appointed by
the Board of Directors or by any committee of said board or by the
<PAGE>
stockholders or otherwise, may be removed at any time, with or without cause,
in such lawful manner as may be provided in the By-Laws of the Corporation.
(4) If the By-Laws so provide, the Board of Directors of
the Corporation shall have power to hold their meetings, to have an office or
offices and, subject to the provisions of the laws of Maryland, to keep the
books of the Corporation outside of said State at such places as may from
time to time be designated by them.
(5) In addition to the powers and authority hereinbefore
or by statute expressly conferred upon them, the Board of Directors may
exercise all such powers and do all such acts and things as may be exercised
or done by the Corporation, subject, nevertheless, to the express provisions
of the laws of Maryland, of these Articles of Incorporation and of the By-
Laws of the Corporation.
(6) Shares of stock in other corporations shall be voted
by the President or a Vice-President, or such officer or officers of the
Corporation as the Board of Directors shall designate for the purpose, or by
a proxy or proxies thereunto duly authorized by the Board of Directors,
except as otherwise ordered by vote of the holders of a majority of the
shares of the capital stock of the Corporation outstanding and entitled to
vote in respect thereto.
(7) The Corporation shall indemnify (i) its directors
and officers, whether serving the Corporation or at its request another
entity, to the fullest extent required or permitted by the laws of Maryland
now or hereafter in force and the Investment Company Act of 1940, including
the advance of expense under the procedures required, and to the fullest
extent permitted, by law and (ii) other employees and agents to such extent
as shall be authorized by the Board of Directors or provided by the
Corporation's By-Laws or by contract and permitted by law. The foregoing
rights of indemnification shall not be exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of Directors may
take such action as is necessary to carry out these indemnification
provisions and is expressly empowered to adopt, approve and amend from time
to time such By-Laws, resolutions or contracts implementing such provisions
or such further indemnification arrangements as may be permitted by law. No
amendment of these Articles of Incorporation or repeal of any of its
provisions shall limit or eliminate the right to indemnification provided
hereunder with respect to acts or omissions occurring prior to such amendment
or repeal.
(8) To the fullest extent permitted by Maryland
statutory or decisional law, as amended or interpreted, no director or
officer of the Corporation shall be personally liable to the Corporation or
its stockholders for money damages, except to the extent such exemption from
liability or limitation thereof is not permitted by the Investment Company
Act of 1940. No amendment of these Articles of Incorporation or repeal of
any of its provisions shall limit or eliminate the benefits provided to
directors and officers under this provision with respect to any act or
omission which occurred prior to such amendment or repeal.
(9) No holder of any stock or any other securities of
the Corporation, whether now or hereafter authorized shall have any
<PAGE>
preemptive right to subscribe for or purchase any stock or any other
securities of the Corporation other than such, if any, as the Board of
Directors, in its sole discretion, may determine and at such price or prices
and upon such other terms as the Board of Directors, in its sole discretion,
may fix; and any stock or other securities which the Board of Directors may
determine to offer for subscription may, as the Board of Directors in its
sole discretion shall determine, be offered to the holders of any class,
series or type of stock or other securities at the time outstanding to the
exclusion of the holders of any or all other classes, series or types of
stock or other securities at the time outstanding.
(10) Notwithstanding any provision of law requiring the
authorization of any action by a greater proportion than a majority of the
total number of shares of all classes of capital stock or of the total number
of shares of any class of capital stock entitled to vote as a separate class,
such action shall be valid and effective if authorized by the affirmative
vote of the holders of a majority of the total number of shares of all
classes outstanding and entitled to vote thereon, or of the class entitled to
vote thereon as a separate class, as the case may be, except as otherwise
provided in the charter of the Corporation. At a meeting of stockholders the
presence in person or by proxy of stockholders entitled to cast a majority of
all the votes entitled to be cast on any matter with respect to which one or
more classes of capital stock are entitled to vote as a separate class shall
constitute a quorum of such separate class for action on that matter.
Whether or not a quorum of such a separate class for action on any such
matter is present, a meeting of stockholders convened on the date for which
it was called may be adjourned as to that matter from time to time without
further notice by a majority vote of the stockholders of the separate class
present in person or by proxy to a date not more than 120 days after the
original record date.
(11) The Board of Directors is hereby empowered to
authorize the issuance and sale, from time to time, of shares of the capital
stock of the Corporation, whether now or hereafter authorized, or securities
converted into shares of its stock of any class or series, whether now or
hereafter authorized, for cash at not less than the par value thereof or for
such other consideration including securities as the Board of Directors may
deem advisable in the manner and to the extent now or hereafter permitted by
the laws of Maryland.
(12) The Corporation reserves the right from time to time
to make any amendments of its charter which may now or hereafter be
authorized by law, including any amendments changing the terms or contract
rights, as expressly set forth in its charter, or any of its outstanding
stock by classification, reclassification or otherwise.
(a) The enumeration and definition of particular powers
of the Board of Directors included in the foregoing shall in no way be
limited or restricted by reference to or inference from the terms of any
other clause of this or any other article of the charter of the Corporation,
or construed as or deemed by inference or otherwise in any manner to exclude
or limit any powers conferred upon the Board of Directors under the General
Laws of the State of Maryland now or hereafter in force.
EIGHTH: The duration of the Corporation shall be perpetual.
<PAGE>
The term "these Articles of Incorporation" as used herein
and in the By-Laws of the Corporation shall be deemed to mean these Articles
of Incorporation as from time to time amended and restated.
SECOND: The amendment and restatement does not increase the
authorized stock of the Corporation.
THIRD: The foregoing amendment and restatement to the
Charter of the Corporation has been advised by the Board of Directors and
approved by the stockholders of the Corporation.
FOURTH: The provisions set forth in the foregoing amendment
and restatement of the Charter are all the provisions of the Charter
currently in effect.
FIFTH: The current address of the principal office of the
Corporation in the State of Maryland is 32 South Street, Baltimore, Maryland
21202.
SIXTH: The name and address of the Corporation's current
resident agent are Corporation Trust Incorporated and 32 South Street,
Baltimore, Maryland 21202.
SEVENTH: The number of directors of the Corporation is ten
(10). The names of the directors currently in office are: Charles F. Barber,
Andrew L. Breech, Carol L. Colman, William R. Dill, Michael S. Hyland,
Clifford M. Kirtland, Jr., Robert W. Lawless, Louis P. Mattis and Thomas F.
Schlafly.
IN WITNESS WHEREOF, SALOMON BROTHERS INVESTORS FUND INC has
caused these present to be signed in its name and on its behalf by its
President and witnessed by its Secretary on ___________ __, 1997.
SALOMON BROTHERS INVESTORS
FUND INC
____________________________
Name:
Title:
Witness:
____________________________
Secretary
Name:
Title:
<PAGE>
THE UNDERSIGNED, President of SALOMON BROTHERS INVESTORS
FUND INC, who executed on behalf of the Corporation the foregoing Articles of
Amendment and Restatement of which this certificate is made a part, hereby
acknowledges in the name and on behalf of said Corporation the foregoing
Articles of Amendment and Restatement to be the corporate act of said
Corporation and hereby certifies that to the best of his knowledge,
information, and belief the matters and facts set forth therein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.
________________________________
Name:
Title:
<PAGE>
SALOMON BROTHERS INVESTORS FUND INC
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints Lawrence H. Kaplan, Alan M. Mandel and
Jennifer G. Muzzey, and each of them, attorneys and proxies for the
undersigned, with full power of substitution and revocation to represent the
undersigned and to vote on behalf of the undersigned all shares of the
Salomon Brothers Investors Fund Inc (the "Fund") which the undersigned is
entitled to vote at a Special Meeting of Stockholders of the Fund to be held
at Seven World Trade Center, New York, New York on March 6, 1997, and at any
adjournment thereof. The undersigned hereby acknowledges receipt of the
Notice of Meeting and accompanying Proxy Statement and hereby instructs said
attorneys and proxies to vote said shares as indicated hereon. In their
discretion the proxies are authorized to vote upon such other business as may
properly come before the Meeting. A majority of the proxies present and
acting at the Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any
proxy previously given.
Please Mark, Sign, and Return this Proxy Promptly
Using the Enclosed Envelope.
Date_______________________________________, 1997
NOTE: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give your full
title.
______________________________________
Signature(s), Title(s), if applicable
<PAGE>
This proxy, if properly executed, will be voted in the manner directed by the
stockholder.
If no direction is made to the contrary, the proxy will be voted FOR
proposals 1, 2, 3 and 4.
Please refer to the Proxy Statement for a discussion of the Proposals.
Please Sign and Date on Reverse Side and Mail in Accompanying Postpaid
Envelope.
Please vote by filling in the appropriate boxes below, as shown, using blue
or black ink or dark pencil. Do not use red ink./_/
FOR AGAINST ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" PROPOSALS 1, 2, 3 AND 4
1. Approval of Amendment to Management /_/ /_/ /_/
Contract to Increase the Base Fee
Component of the Management Fee.
2. Approval of Amended and Restated /_/ /_/ /_/
Articles of Incorporation of the Fund.
3. Approval of an Amendment to the Fund's /_/ /_/ /_/
Fundamental Investment Policy Regarding
the Borrowing of Money to Meet
Redemption Requests.
4. Approval of an Amendment to the Fund's /_/ /_/ /_/
Fundamental Investment Policy Regarding
the Lending of Portfolio Securities.
5. Any other business that may properly /_/ /_/ /_/
come before the meeting.
I will be attending the meeting. /_/
